On the heels of its buyout of Access Oncology Inc., Keryx Biopharmaceuticals Inc. entered definitive agreements with institutional investors to raise about $32 million through a private placement of common stock at $10 per share.
The deal, expected to close this week, leaves New York-based Keryx with about $60 million in cash, enough to take the firm well into 2007, said Michael Weiss, chairman and CEO.
Keryx's stock (NASDAQ:KERX) closed Friday at $12.62, up $1.47.
Weiss said the new funds will support clinical efforts regarding the compounds KRX-101, the lead product, and KRX-0401, a product acquired in the takeover of Access, also based in New York.
"We have money that's always been dedicated to KRX-101," he said. "This gives us more flexibility to broaden out our KRX-0401 program." The cash also lets Keryx consider more acquisitions of clinical-stage drug candidates, Weiss said.
"We tend to be opportunistic, but certainly oncology is an area we gravitate toward," he said. "The vast majority of opportunities are going to be oncology focused. More than half [of the biotechnology drugs] working their way through the clinic are in oncology, and my guess is that filters down to preclinical as well."
Keryx is busy in other areas, too. KRX-101 (sulodexide) is a first-in-class oral heparinoid compound for the treatment of diabetic nephropathy, for which Keryx recently commenced its U.S.-based Phase II/III program.
"The first part we're designating as Phase II, and it's designed to roll into the Phase III portion, which will be the larger registration study by the end of the year," Weiss said.
Keryx disclosed in January its plan, completed the following month, to buy Access, which gave it KRX-0401, KRX-0402 and KRX-0403. Access was founded in 1999 by Weiss and had been headed by Craig Henderson, president and CEO, since 2001. (See BioWorld Today, Jan. 9, 2004.)
The first acquired drug is a first-in-class, oral AKT-inhibitor that has shown single-agent antitumor activity in Phase I studies and is being tested in nine Phase II single-agent trials in six tumor types, including breast, prostate, melanoma, pancreatic, sarcoma and head and neck cancer. The studies are being conducted by the National Cancer Institute in Bethesda, Md., under a collaborative research and development agreement.
Activating the AKT pathway apparently plays a role in cell survival and proliferation, and orally administered KRX-0401 is believed to be the only AKT inhibitor in clinical development mainly for cancer, although some companies have preclinical experiments ongoing, Weiss said.
"My impression is that it's a relatively new area, first identified in the mid-1990s, but there's been a massive amount of research dedicated to AKT pathways over the last five, six or seven years," he told BioWorld Today.
The drug also has been shown to significantly inhibit signal-transduction pathways including MAPK and JNK, with preclinical data suggesting synergy with other cancer therapies, and Keryx said it plans to begin studies testing KRX-0401 this year in combination with chemotherapy in multiple cancer types.
The second drug, KRX-0402, is an inhibitor of DNA repair, which also is being studied by the NCI under a collaborative deal in multiple Phase II trials. The third drug, KRX-0403, is a spindle poison, or blocker of cell division, in the same general class as Taxol (paclitaxel) and others. It's expected to enter Phase II studies this year.
"We want to be a commercialization company, so we're not aggressively looking for partners on any of the compounds," Weiss said.
The main investors in the private placement, collectively putting in $25 million, are Deerfield Partners, of New York; Maverick Capital, of New York; and T. Rowe Price, of Cambridge, Mass.